Re: Interesting writeup
phil dude,
You're still wrong though. Even if you have done your research.
Who pays the tax is not the same as who suffers the tax. That's tax incidence.
I'll be paying out £20k to the VAT man in a few days. Sadly the company's cash, not mine. But neither I, nor the company, is actually paying that tax. Nor (at least to my knowledge) are any of the companies who we invoiced - and got paid that VAT money in the first place. We're somewhere deep a chain of business transactions, many invoices away from the poor customer - who actually gets to swallow that VAT bill. All of us bill it, all of us claim it from what we buy, and all of us pay the difference back to HMRC.
As another example it's widely considered in economics that companies do not bear the cost of Employers Contribution to National Insurance. They have to pay it of course. They also hand over the money for employees NI contribution and income tax - and deduct that straight out of the pay packet. But the assumption is that in two countries with identical personal taxation and economies, but one where no employers NI had ever existed, the same total amount of cash would get paid out in wages and payroll taxes, it's just that wages would be higher in the country without employers NI. That's the amount of money employers want to hand over to their staff, and that's what they'll pay, it's just the government is intercepting a bit more of it. Obviously when you change an already existing system, things won't change smoothly.
The same is considered to be true of business rates. Companies can afford a certain amount for their premises, and a working market will eventually bring them to roughly that. Because what markets do is to ration scarce resources. So if you're not willling to pay as much as other people, you won't get the shop you want. Or won't keep it for long. Therefore if the government is taking some of that cash companies have to spend on thie premises - that's coming from the landlord's share.
Biting the hand that feeds IT
